Advantages of procurement planning are: ensures that procurement cycle are followed and each person in the cycle gets to know his or her task in delivering the product, it provides time frame indicating when the procurement process should be initiated; it is also used for soliciting/lobbying for funds for donors. The aim and challenge of sustainable procurement is to integrate environmental and social considerations into the procurement process, with the goal of reducing adverse impacts upon health, social conditions and the environment, thereby saving valuable costs for public sector organizations and the community at large. However, prior to release of a specification, as part of a solicitation, the buyer must be satisfied that its inclusion will result in a fair and equitable purchase. An RFP contains a detailed description of the goods or services that a buyer seeks, and it allows suppliers to provide price quotes for the materials and labor required before a purchase contract is drafted. The disadvantages are: it is bureaucratic and it has been know to be the causes of delays in delivering products and services. Performance Specification—A type of specification in which the goods and/or services are described in terms of required performance. It is important, therefore, that all expectations are captured in the specification. function of an organization. In most capitalistic countries, these benefits are almost taken as read, meaning any argument is usually about the scope and procedure of public sector procurement. Procurement Chapter 4 - Specifications 4.1 Generally.. procurement strategies that would provide a basis for effectiveness report-ing. As a recent publication frames it, the shift towards performance-based It can also be advantageous to those suppliers who can meet the specifications, because it allows them to stand out from their competitors. Descriptions should be drafted to address the City's needs, and the costs of procuring, operating and maintaining the supplies and services. If you specify that you require a certain biodegradable material to be used in constructing a new building, for example, a contractor may be able to suggest an even more environmentally friendly and cost-efficient alternative that you had not considered. If they are not, the supplier may meet the specification but not at all satisfy the organisation’s actual needs. Privacy Statement - You're working on the procurement plan for the computer software program? In this regard, identified as one major tool to improve public buying has been the employment of performance-based specifications (PBS) in the early stages of the procurement process. The factors should therefore be considered at the beginning of a procurement. Rather than requesting a quote for drywall, as another example, a building contractor might specify that it requires drywall made from at least 50 percent recycled materials. From the procurement perspective, the purpose of specifying requirements is to provide the information that the supplier requires in order to reliably meet the organisation’s expectations. Dealing with Advantage (2) Natural World Products v Arc 21 [2007] •Bent over backwards to be fair to others •And in so doing was unfair to the advantaged bidder Allpay Limited v NI Housing Executive [2015] •Not illegitimate for a bidder to use its advantage in the market for its own benefit in a procurement. Specifying your required composition in requests for proposal can help to narrow the field of potential suppliers quickly. 13th Aug 2018 Construction Reference this Disclaimer: This work has been submitted by a university student. The purchasing function typically acts as the interface between the customer (internal or external) and suppliers. He has earned a Bachelor of Arts in management from Walsh University. © 2000-2020, Inc. All Rights Reserved. You can view samples of our professional work here. Procurement Optimization Can Lead to Significant Savings. As a small-business owner, Ingram regularly confronts modern issues in management, marketing, finance and business law. When undertaking procurement, value for money factors should be included in the specification and the evaluation criteria. When you take the time to specify the exact composition of materials you seek, it can help potential suppliers to understand your procurement needs and objectives more clearly. What are the advantages & disadvantages of Bookkeeping? Businesses around the world hire top procurement companies in an effort to perfect their procurement function and ensure efficiency in all related functions. Procurement is central to the government service delivery system, and promotes aims which are, arguably, secondary to the primary aim of procurement such as using procurement to promote social, industrial or environmental policies (Cane, 2007). Specifying Composition in Procurement Requests for proposal can be as general or specific as desired. Every day, thousands of new job vacancies are listed on the award-winning platform from the region's top employers. Numerous organizations are spooky due to the disorganization. Terms of Use - The importance of Specification within the procurement places. Or you may design your specification for all users, except in justified cases, including a conformity assessment e.g. Procurement Strategies: Advantages and Disadvantages. Specifications describe in detail the supplies and services the City seeks. is the leading job site in the Middle East and North Africa, connecting job seekers with employers looking to hire. Prior to 2002, public procurement in Kenya was geared towards large and established contractors. 4. The other advantage of the standardization is that it has a positive effect in the formation of strategic alliances between different organizations; it is quite clear that the merger of companies concerning the matters of standardization is beneficial in that the outcome of synergy can help with the reduction of costs as well as increasing profits of business. You're working on the procurement plan for the computer software program that? Rather than requesting a general quote for printing ink, for example, a print shop might specify that it requires printing ink made from soy-based pigments. The main advantages are reduced costs and the ability to benefit from specialist expertise. This is not an example of the work produced by our Essay Writing Service. Traditional procurement has focused upon value for money considerations. The advantages of design and build tend to counter the disadvantages of traditional contracting procurement methods. Specifying the required composition of materials or goods is a highly precise way to to obtain more-specific quotes from suppliers. (; see later section). It serves as a written interpretation of that brief and by ensuring that you have fully understood the client's wishes and the assets that they require, it serves as a key check on performance criteria… Procurement is often a misunderstood and disregarded (unfortunately!) to join your professional community. DoF # of demands Specifying the exact composition of materials in your order can help potential suppliers to provide more accurate and detailed price quotes. When sending RFPs, specifying the exact composition of the goods a buyer seeks can provide a range of advantages to both the buyer and potential suppliers. 5382 words (22 pages) Essay. Design and Build is a way to fast track construction and the contractor often should dictate a fixed cost or a guaranteed maximum price that offers certainty to the client. Requests for proposal can be as general or specific as desired. The necessity of specification is to verify and check the strength of materials for a work involved in a project. You are the project manager for an upcoming outdoor concert event. Public sector procurement is when public bodies choose and contract commercial companies to provide goods and services. Cookie Policy. However, procurement optimization can produce a host of benefits and add tremendous value to your organization as a whole. They may include such details as required power, strength of material, test methods, and standards of acceptability and recommended practices. This can allow a company to more easily locate the ideal suppliers who are able to deliver exactly what they require. An assurance of client satisfaction The specification is an interpretation of the initial brief provided by your client. Economic operators submit both selection (qualification) information and tenders at the same time in response to the contracting authority’s advertised require-ments. Describe the Unique Challenges of Strategic Resource Management for a Manufacturing Company, Traditional Competitive Procurement Processes, The Concept of Supply & Its Uses in Business, TechSoup: An Overview of the RFP Process for Nonprofits, Charities, and Libraries, Request for Proposals (RFP), An Inventory Control System RFP's Ethical Standards. There are so much advantage for procurement, but this a few of them. Public Procurement Practice SPECIFICATIONS Element 1.2a: Advantages of performance specifications n Provide opportunity for innovation; allow offerors to put forth unique solutions to defined needs n Allow end user to benefit from the latest products and technologies n Corrective action may be applied if service levels are not achieved Element 1.2b: Disadvantages of performance specifications This can save both time and resources for the buyer and any potential suppliers who cannot meet the buyer's precise specifications. This, in turn, can provide greater insight for your purchasing decisions. This can be significantly lower when the length of a specification is short and the time taken in its preparation is reduced. or log in Advantages of procurement planning  are: ensures that procurement cycle are followed and each person in the cycle gets to know his or her task in delivering the product, it provides time frame indicating when the procurement process should be initiated; it is also used for soliciting/lobbying for funds for donors.